The Federal Trade Commission is going after Facebook and its potential antitrust practices—and the tech giant’s rivals are all too happy to help them out. The Wall Street Journal reports that FTC investigators are talking to Facebook’s competitors both past and present about the company and its “hardball tactics” as part of its antitrust investigation, in order to get a better sense of the company’s potential pattern of behavior to stifle its competition. Among those the agency has already reportedly reached out to is Snapchat owner Snap Inc., who have long felt that Facebook has been out to take them down. They’ve been so convinced of this, in fact, that Snap’s legal team has for years kept a dossier chronicling the ways that Facebook has tried to thwart Snap’s competition—and its name is Project Voldemort.
The documents contained in Project Voldemort, per the Journal, include a number of allegations against Facebook, including alleged instances of Facebook persuading Instagram “influencers” not to reference Snap, blocking searches for Snap-related terms, and preventing Snap content from trending on Instagram’s Explore section. Stoking the FTC’s fears that Facebook has strategically bought startups it believed could soon become competitors, the Journal reports that when Facebook CEO Mark Zuckerberg met with Snap CEO Evan Spiegel and Foursquare Inc. co-founder Dennis Crowley, the tech mogul gave the startup execs an ultimatum: Either sell their companies to Zuckerberg at the price he demands, or watch as Facebook copies their product and “make[s] operating more difficult.” And when Spiegel and Crowley refused to sell, that’s exactly what Zuckerberg did, launching Instagram and Facebook Stories; location check-ins; and other features that mimicked Snap and Foursquare’s functionality. FTC investigators are also reportedly looking into Facebook’s 2013 purchase of Israeli mobile-analytics startup Onavo, which redirected users’ internet traffic through Facebook’s servers and allowed them to track user activity—including many highly specific details about their Snapchat usage, such as how many messages users sent and how much time was spent using specific features.
Of course, Snap and Foursquare aren’t the only ones who Facebook has targeted over the years and allegedly attempted to bring down. Ashley Madison Chief Strategy Officer Paul Keable, whose company has been blocked from advertising on Facebook, said the tech giant’s tactics have long been a source of concern around Silicon Valley. “Facebook has created a scenario where they get to pick and choose who wins based on their personal whims,” Keable told the Journal. “All while running their own competitive products.” Over the past few months alone, the Journal reports that FTC investigators have already reached out to “dozens” of tech executives and app developers, including those whose companies have been bought by Facebook or have folded after losing access to its platform. For its part, Facebook maintains that its practices are above board and just a normal instance of companies “iterating” on others’ ideas. “This is competition at work and one of the longtime hallmarks of the tech sector,” a Facebook spokeswoman told the Journal. “Businesses continually build and iterate on concepts and ideas in the marketplace—making them better or taking them in different directions. This is good for consumers.” Privately, though, the Journal reports that Facebook’s senior officials are getting worried about their rivals divulging damaging dirt to the federal government, and “have discussed ways to improve the company’s relationships around Silicon Valley.” Facebook’s reported attempt to befriend its rivals is part of a broader strategy by the company to ward off its antitrust allegations, including backing off of planned acquisitions that could set off antitrust alarm bells and attempting to more fully integrate WhatsApp and Instagram with Facebook.
The FTC’s antitrust probe of Facebook is one of several the company is currently facing, along with general antitrust investigations into the tech industry by the U.S. Department of Justice and House Judiciary Committee, and a Facebook-specific investigation by nine state attorneys general. Realizing that the one thing that seems to bring both sides of the aisle together right now is their mutual desire to take Facebook to task, Zuckerberg went to Washington D.C. last week to meet with lawmakers—and even President Donald Trump, who said the two had a “nice meeting.” While details about Zuckerberg’s meetings haven’t been disclosed, lawmakers expressed appreciation for how “seriously” Facebook is taking the criticisms wielded against it, from antitrust and data privacy concerns to its planned cryptocurrency. But Capitol Hill still seems as ready as ever to take Facebook on—and Zuckerberg, for his part, is yet to cave. Republican Senator Josh Hawley, a noted tech critic, said he asked Zuckerberg point-blank during their meeting to sell WhatsApp and Instagram to “prove that you’re not afraid of competition.” “Safe to say he was not receptive to those suggestions,” Hawley told reporters.
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